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Cross Border Bidders Versus Domestic Ones

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International Business Mergers and Acquisitions in Japan

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Abstract

This chapter investigates differences in targets overtaken by cross-border bidders versus domestic ones. The literature from the selection theory argues that there is “cherry picking.” That means, cross-border bidders overtake the comparably better performing targets in contrast to domestic bidders, which acquire weaker targets in a sort of “rescue mission.” Targets in the study were investigated to see if this statement holds true.

The results show that cross-border targets did not perform better but performed worse than domestic ones. According to my sample, I have to conclude that there is no “cherry picking” of Japanese firms at Japanes firms at cross-border acquisitions. This lends support to the idea that foreign bidders probably come to the acquisition target at a later stage. To put it differently, Japanese firms get overtaken by foreign bidders in case where no domestic firm is interested in overtaking the target. Reasons are discussed.

This chapter is an updated version of Bebenroth (2010) Inbound M&A to Japan: cherry picking versus rescue mission? Kobe Economic & Business Review 54: 1–16

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Authors and Affiliations

  1. Kobe University Research Institute for Economics & Business Administration (RIEB), Kobe, Hyogo, Japan

    Ralf Bebenroth

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  1. Ralf Bebenroth
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Correspondence to Ralf Bebenroth .

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Bebenroth, R. (2015). Cross Border Bidders Versus Domestic Ones. In: International Business Mergers and Acquisitions in Japan. Springer, Tokyo. https://doi.org/10.1007/978-4-431-54989-5_8

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